Everything you own was made in China, too. In 1979, when the Great Divergence began, you and I didn't own anything made in China. With Mao only three years in the grave, China still had a sluggish centrally planned economy. In that year, Mao's successor, Deng Xiaoping, decided enough was enough and inaugurated various market reforms.

"Black Cat, white cat," the Communist leader famously said. "What does it matter what color the cat is as long as it catches mice?"

Since 1979, China has caught a stunning quantity of mice, raising the annual value of its exports a hundredfold. In 2007, China displaced the U.S. as the world's second-biggest exporter, and in 2009 it displaced Germany as the world's biggest exporter. That year, China's per capita gross national income was $6,710-compared to $47,240 in the U.S.-and the U.S.'s trade deficit with China stood at @227 billion. Given China’s aggressively mercantilist trade policy and its12

Did China—and growing trade competition from other low-wage nations—cause the Great

Divergence?

Two decades ago, Adrian Wood, a British economist, started arguing that trade with low-wage

countries lowered wages for unskilled workers in developed countries. “There is a clear inverse

association,” Wood

experienced larger falls in manufacturing employment.” But in the United States, Wood had to

concede, imports of manufactured goods from low-wage countries still totaled less than 3 percent

of gross domestic product. By itself, that wasn’t enough to displace many workers. Wood

answered by arguing the effects were subtle and indirect. For example, he wrote that imports

from low-wage countries required more labor than other goods, and therefore displaced more

U.S. workers than imports from high-wage countries.

Most leading economists in the U.S. didn’t buy it. Paul Krugman (then at MIT, now at Princeton)

and Robert Z. Lawrence (then at the Brookings Institution, now at Harvard), argued that

international trade had played a much smaller role in U.S. manufacturing’s decline than had

domestic considerations. Among these, ironically, was the U.S. manufacturing sector’s own

efficiency, which had lowered prices on consumer products and therefore on the proportion of

advice, college tuition). Between 1970 and 1990, the prices of U.S. goods relative to services had

fallen by nearly one-quarter. “Although the effect of foreign competition is measurable,” Krugman and Lawrence concluded, “it can by no means account for the stagnation of U.S.

earnings.”

Two decades later, Krugman decided his earlier analysis no longer held up. “My argument was

always yes, Krugman told me. But in the 1990s there simply weren’t enough of them. That changed in the aughts. In a Institution, Krugman observed that the United States had in 2006 crossed “an important watershed: we now import more manufactured goods from the third world than from other advanced economies.” Imports of manufactured goods that came from less-developed nations

had more than doubled as a percentage of gross domestic product, from 2.5 percent in 1990 to 6

percent in 2006. Moreover, the wage levels in the countries ramping up U.S. trade the fastest—

Mexico and China—were considerably lower than the wage levels in the countries whose

increased U.S. trade had created worry in the 1990s—South Korea, Taiwan, Hong Kong,

Singapore. The Southeast Asian nations had, in 1990, paid workers about 25 percent of what

U.S. workers received. By 1995 they paid 39 percent—demonstrating, reassuringly, that lowwage

I have a friend that I have met on the WWW that would like to get married to an American woman.

I some info on him that I have been meaning to write down and post as well as pictures of him. Unfortunately, illness and time has gotten in the way of me doing ANYTHING on my blog or Facebook for some time.

I am getting back in the swing and wanted to give everyone a heads up that I will be composing and posting pictures of my friend, Babar, very soon. He is praying to find someone soon, and I have let him down by not posting about him wanting to find a wife for too long now.

If anyone is intrested before I am able to post the bibliography and pictures, just let me know and I will be glad to forward your email to him to get things started. I am praying for him that he will find that one person that the Good Lord has created just for him, whether it is here in America or another country.

Look for more info soon!

BTW, I also have pictures I will be posting soon and info on Mason's races now that he has started. (Even on a injured ankle.)